AbstractMultinational Corporations (MNCs) account for a large share of foreign direct investment in the developing nations. As multinational firms become more predominant in the local economy, host country policy makers and MNC managers are challenged to interact in an environment of often conflicting objectives. This paper identifies and discusses the policy issues that arise as multinational corporations invest in the developing nations. The policy issues are grouped into two general categories: macroeconomic policy issues and industry or firm specific policy issues.